Bitcoin USD daily basis
Bitcoin USD Chart Analysis – Consolidation below 60’000 USD
In the reporting week, a correction phase dominated, with its lowest point occurring on Thursday. Right at the beginning of the week, losses led to a first correction, which brought the price back to the zone of 54’000 USD. The triangle formed in the previous week was broken downwards, and this triggered technically based selling pressure. After an indecisive trading day on Tuesday, the tendency for prices to fall continued on Wednesday. On Thursday, the correction that had been ongoing since the beginning of the week bottomed out at 50’434 USD, directly at the 50-day moving average. On Friday, incipient purchases led the Bitcoin price back to the 55’000 USD mark. By the weekend, the price consolidated in narrow trading ranges above the 55’000 USD zone.
Intact structure of the uptrend
Review daily interval
After the price drop in mid-March 2020, a veritable countermovement was established. This led to the resistance zones starting at USD 10’000. After an initial rejection, and a consolidation phase lasting almost two months, a breakout through the fundamental resistance zone followed on July 27, which had been established since August 2019, and had already caused Bitcoin to fail several times to date.
The resistance zone around USD 10’000 was interesting in several respects. On the one hand, the 0.618 Fibonacci point of the entire downward movement, which was initiated at the end of June 2019 just below 14’000 USD, is located here. On the other hand, the zone around USD 10’000 simultaneously acted as a confirmation of the still bearish trend from lower highs since December 2017 (see macro view on a weekly basis). Bitcoin was able to establish itself above the newly created support in the USD 10’000 area since the end of July 2020, and provided a first confirmation of a trend reversal with the break of the resistance zone around USD 12’200 towards the end of October 2020. The aforementioned resistance zone had been effective since January 2018, and served as a zenith for the price several times since then. In the following weeks, the positive trend accentuated and led Bitcoin through the 14’000 resistance in early November 2020 and close to the then all-time highs around 20’000 USD for the first time in early December, which remained untouched for 158 weeks since the bull market in 2017.
Since the breakout through the important 14’000 resistance at the beginning of November, it has been blow by blow. The break through the old all-time high at USD 20’000 saw a strong accentuation of the uptrend. Subsequently, the price doubled in only 23 days. A first correction brought the price back below USD 30’000. Thereafter, a renewed upward movement began, which finally led above the previously reached all-time high at USD 42’000 and marked a new all-time high just below USD 60’000 on February 21. After an incipient correction, a new all-time high was recorded just below the USD 62’000 mark. Since then, the price has been consolidating below the new all-time high.
Bitcoin has been in an accentuated uptrend since the break of the 2017 all-time high. This has been accompanied by two healthy consolidations so far, which found their bottom above the 50-day moving average (light blue line). Since then, the price has been moving around a trend line, which acts as support and resistance, respectively. A resulting regression trend over two standard deviations has since served as an accurate indicator of the trend channel.
The structure of the uptrend is absolutely intact with the respective lows of the previous correction above the 40’000 USD mark. The market has been developing accordingly around the mentioned trend line since mid-December. As expected, the break of the triangle formation in the reporting week led to further selling pressure. This brought the Bitcoin price to the lower line of the trend channel and to the 50-day average. Just at this technically important point, the market found its temporary low, and has since been moving back to the trend line. In the process, a “bullish flag” is forming. With a break of this formation towards the top, buying pressure is to be expected, which would then hit the first resistances from 60’000 USD. If a correction occurs, the lower trend line of the regression channel in the area of 51’500 USD serves as support. Just below it is the 50-day moving average (light blue line), which has so far served as a good indicator of the bullish phase that started in November.
The intact bullish momentum would be damaged with the break of the channel and the 50 day moving average in the area of 47’000-45’000 USD. In this case, the area around 40’000 USD serves as renewed support.
Macro: New all-time highs
Bitcoin was able to set a higher all-time high above USD 10’000 for the first time in the weekly interval in 2020, which broke the prevailing bearish trend since December 2017. This broke the series of lower highs that lasted for 135 weeks (1).
Since the break of the bearish trend, signs of a valid trend reversal have been building up. With the push through important resistance zones and a continuous development above the 21-week average (2), the probabilities for a renewed reaching of the all-time high created in 2017/18 increased. This was accomplished in mid-December 2020. Since then, a strongly accentuated price discovery above this mark has been taking place.
With the price movements in the past year, a good foundation was created to sustainably climb new spheres beyond the all-time highs reached in 2017. The break of USD 20’000 impressively demonstrated the power of the upward movement that had been established since October. It led to a parabola (yellow), which is currently ongoing and reached its first high at just over USD 42’000. After a one-month correction, this was continued and found its high above USD 58’000. After a second correction phase, the price reached its preliminary all-time high in the ongoing price discovery phase in the reporting week below 62’000 USD. Thus, there are no resistances for the time being.
In case of an incipient correction, a respect of the previously created supports (green) over the next weeks/months will be necessary to make the initiated phase of exploration in new price spheres sustainable. A departure from the parabola (yellow) would indicate a future slowdown of the upward movement, and makes further corrections more likely. Should these begin, the support zone at 39’000 USD, formed by the one-month march stop, remains to be observed first. In case of a continued correction, the 21-week average (2) becomes relevant, which so far could reliably indicate bull and bear phases. This is currently in the area 35’000 USD and rises accordingly fast. Further support zones in the weekly interval can be found in the area of 20’000 USD.
*Originally posted at CVJ.CH
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